State of the Market | Ben Zises | SuperAngel.Fund
Dear Friends,
Instead of this week’s ‘Founder Friday’ post, I’ve decided to share an email with you that I recently sent to all the trusted LPs in SuperAngel.Fund - please see below. Wishing you a safe and happy holiday weekend! —Ben
State of the Market - Summer 2022
Dear Trusted Investors, Partners, & Friends,
Given the changing market conditions over the last few months, many of you have reached out to me with questions and to get my thoughts on the fund’s continued strategy, focus and future.
Some of you have also asked whether it was prudent to subscribe for another year, given the current market volatility, and to that question, my answer is simple: Yes.
I maintain deep conviction in our strategy, and believe the market turbulence will work in the fund’s favor. To rearticulate our approach:
Invest as close to the first check as possible
Focus on the categories we know best
Leverage our massive network on behalf of our portfolio companies
Provide operational, sales & team building support
Champion our companies religiously to drive incremental exposure, customers, and business opportunities
Position ourselves as each founder's favorite and most helpful investor
Following these core principles has proven to be extremely effective. I’m proudly linking a list of markups in the fund so far [REDACTED], while noting that it's only been 18 months since we began investing in our current fund structure.
Investing at the stage and with the check sizes that we do has allowed us to participate in more competitive and highly sought-after deals, giving us an inside track and option to double down when those companies show traction and breakout success/growth metrics. This also provides us with unique diversification across each quarterly fund, one of the most important attributes of a successful early stage investment portfolio.
We also leverage our relationships and draft off the deep diligence performed by larger funds. The best founders will often secure a lead commitment from a top tier fund, then either find us directly or be referred to us as a 'Strategic Angel' check to help support their business. To that point, below is an email I got last week from a new founder who was previously a Director at a leading ‘FAANG’ company:
“Confidentially, we just reached an agreement with [Top tier fund 1] and [Top tier fund 2]. We will be looking to bring onboard creators and DTC brand experts to help us bootstrap the network and advise us along the way. And we will be prioritizing based on how much support we can get from either known operators or known investors (such as yourself) in this space. This is the synergy I was looking to discuss.”
Relative to the market, I look at the downturn as a positive. These challenging times are flushing away the short term founders and fund managers who (i) are not willing to put in the proper time and diligence work required, (ii) realize this is not their passion, or (iii) discovered that you cannot get rich quickly in this space. This market is elevating the long term focused investors, like us.
The companies we're invested in that are performing and growing are still getting funded (we've seen 4-5 markups in just the last few weeks), and we are benefiting from lower entry points due to market conditions. A larger number of higher quality deals are coming to us given the awareness, reputation and credibility we've established as a leading fund in pre-seed/seed stages. We also get the benefit of deals moving a bit slower, which provides more time to diligence and build a great relationship with founding teams. Ultimately, we’re investing 5-10 years out from a company’s exit, which is when we’ll be in an entirely different market than today. And, the companies we are investing in today will be shaped in disciplined times.
Here's one tweet I read over the weekend from Paul Graham, considered one of the most successful early stage investors. Summary > the best investors keep investing.
We have new investors joining the fund regularly, the majority of which skew towards founders with strong connections seeking diversification, and GPs of other funds - all of whom we collaborate with closely to share deals and networks.
I remain extremely grateful for your participation and will continue providing detailed quarterly updates along the way. Stay tuned for the ‘Q2 2022’ update coming shortly. As always, feel free to reach out with any specific questions by phone or email (ben@superangel.vc).
Sincerely,
Ben Zises
Overview
As a refresher, SuperAngel has two distinct vehicles - our fund and syndicate.
The fund is structured as a Rolling Fund, which is a series of quarterly funds that enables LPs to join at any time and participate in all investments made during the quarters which the LP invests in (4-quarter minimum). Click here to apply.
Our syndicate allows investors to review specific opportunities instead of pre-committing to the fund (generally 1 per quarter). There is no commitment when joining the syndicate - members are notified when we have a new investment to share and can choose to invest or pass based on their own discretion. Note, there are often limited allocations for syndicates and priority is given to fund LPs on a first-come, first-served basis. Click here to apply.
SuperAngel.Fund is an early stage fund that invests in Consumer, PropTech & Future of Work. You can learn more at SuperAngel.Fund.
